Helping Rural banks Comply with Microinsurance Regulations

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Helping Rural banks Comply with Microinsurance Regulations

  1. 1. 2010 RBAP-MABS NATIONAL ROUNDTABLE CONFERENCE “Microfinance: From Best Practice to Next Practice” June 2-3, 2010 Hyatt Hotel and Casino, Manila HELPING RURAL BANKS COMPLY WITH MICROINSURANCE REGULATIONS By: VIDA T. CHIONG Deputy Insurance Commissioner
  2. 2. Microfinance and Microinsurance : Complementary Partners in Poverty Alleviation 1
  3. 3. Intro….. BSP Circular No. 683 Series of 2010 ….” allowing rural, cooperative and thrift banks to present, market and sell microinsurance products.” A major breakthrough for the Microinsurance Program 2
  4. 4. MICROINSURANCE PRODUCTS AND CONTRACTS WELCOME TO MICROINSURANCE 3
  5. 5. MICROINSURANCE PRODUCT Daily Premiums/Contributions   not more than 5% of the current daily minimum wage rate (P19.00) Guaranteed Benefits   not more than 500 times the current daily minimum wage rate (P190,000.00) The maximum amount of premium and guaranteed benefits applies on a per product or per policy basis. 4
  6. 6. Microinsurance Contract   Coverage   Period of Cover   Risk & Contingent Events Covered   Terms & Conditions   Effectivity   Claims Settlement   Dispute Resolution 5
  7. 7. For Life Microinsurance Contracts:   Grace Period - maximum of 45 calendar days from due date of premium   Contestability - 1 year from effective date or date of last reinstatement of the contract   Suicide Provision - 1 year from the effective date or date of last reinstatement of the contract 6
  8. 8. A microinsurance contract should bear a microinsurance logo to distinguish it from other insurance products. 7
  9. 9. LICENSING REQUIREMENTS AND PROCEDURES (PROPOSED)   Microinsurance agents/brokers shall not required to take the regular licensure examination, but: •  shall have to undergo an approved Microinsurance Training Program; and •  pass a qualifying examination at the end of the Program. 8
  10. 10. Licensing…..   Licensed regular agents/brokers shall be allowed to sell microinsurance products   Microinsurance agents/brokers are being considered to sell only microinsurance products   Minimum Paid-Up Capital Requirement •  Microinsurance general agent – P125,000.00 •  Microinsurance broker – P10 M 9
  11. 11. Licensing…..   Microfinance institutions (e.g. rural banks) may be licensed provided that:   the institution is empowered under its articles of incorporation to transact microinsurance business   the application shall be accompanied by: • a copy of general agency agreement between the institution and the insurance company; •  a copy of the power of attorney executed by the insurance company empowering it to receive notices, summons and legal processes 10
  12. 12. Licensing…..   Cannot be licensed as a Microinsuranc broker and Microinsurance agent at the same time.   The license expires June 30 of each year and may be renewed if in compliance with rules and regulations. 11
  13. 13. CONCLUSION Twin Pillars for the Development of Microinsurance   National Strategy   Regulatory Framework 12
  14. 14. Ongoing Thrusts   Formulation of Performance Standards   Microinsurance Products Development   Financial Literacy 13
  15. 15. 3rd International Conference on Microinsurance Manila, Philippines 8-11 Nov. 2010 14
  16. 16. INSURE TO BE SURE THANK YOU 15

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